On the Meaning of Money

Andrew Tallman had a good explanation of the meaning of money, and it's value, in his column today over at Townhall.com. The heart of the explanation is here:

In truth, it’s simple. The wealthy don’t owe us. Literally, we owe them. That’s what money means.

If I have $50,000 in a bank somewhere, that means that society owes me goods and services in the amount of $50,000. If I spend $20,000 of it on a car, society doesn’t owe me as much anymore because they’ve compensated me in the form of that car. Everyone collectively still owes me $30,000, which I can collect on in a variety of ways.

Money is an IOU from society that we give people when they give us things we desire or do things for us we want. So when a person makes a lot of money, it means that he has done beneficial things for a lot of people. If he accumulates these IOUs in a storage facility somewhere, he is amassing wealth not because he owes society, but precisely because society owes him the value of all those accumulated and uncollected debts.

I had never thought about it quite like that.

Thomas Sowell makes a good point as well when he says that very few people remain in the same station in life over their lifetime. A student may be initially living below the poverty line. But when he gets a job after college, he may find himself among the lower middle class. Later, with more affluence, he may get married, have children, and, as his children go off to college, may find himself among the "Richest Americans," as The One would describe him. After retirement, he may find himself a member of the middle class again, having paid off his mortgage, driving less, and with fewer expenditures for daily living.

What the Obamamessiah is trying to do is to perform works of charity with other peoples money. Charity can only be done by someone giving of himself. When someone takes from others, which is what taxes are, and gives it to someone else, that is not charity. That is cheap and dishonest. Any politician with principles would know that, and would discourage it whenever it reared it's ugly head.

In talking to people about this, a number say, in essence, "Society is already taxed, and money is given for welfare, so this is just taking it a little farther. We aren't going to stop, so if we are already doing it, why shouldn't I get some." Such people tacitly admit that a wrong is being done, but then go one to say we should do more of it! Bah! I have little tolerance for such thinking.